Reserves for Unpaid Losses and Loss Adjustment Expenses (Tables)

12 Months Ended

Dec. 31, 2014

The following table summarizes the loss and LAE reserve activities of White Mountains’s insurance and reinsurance subsidiaries for the years ended December 31, 2014, 2013 and 2012:



	Year Ended December 31,
Millions	2014			2013			2012
Gross beginning balance	$	3,079.3		$	3,168.9		$	5,702.3
Less beginning reinsurance recoverable on unpaid losses	(428.1		)	(429.1		)	(2,507.3		)
Net loss and LAE reserves	2,651.2			2,739.8			3,195.0

Less: Beginning net loss and LAE reserves for AutoOne and the Runoff Transaction⁽¹⁾	—			—			(383.3		)

Loss and LAE reserves acquired⁽²⁾	45.4			37.7			17.0
Loss and LAE reserves consolidated — SSIE	13.6			—			—

Losses and LAE incurred relating to:
Current year losses	1,175.3			1,088.9			1,235.8
Prior year losses	(6.0		)	(48.4		)	(41.9		)
Total incurred losses and LAE	1,169.3			1,040.5			1,193.9

Accretion of fair value adjustment to net loss and LAE reserves	0.7			1.7			10.6
Foreign currency translation adjustment to net loss and LAE reserves	(36.0		)	.3			12.9

Loss and LAE paid relating to:
Current year losses	(345.3		)	(336.2		)	(404.7		)
Prior year losses	(823.0		)	(832.6		)	(901.6		)
Total loss and LAE payments	(1,168.3		)	(1,168.8		)	(1,306.3		)

Net ending balance	2,675.9			2,651.2			2,739.8
Plus ending reinsurance recoverable on unpaid losses	483.9			428.1			429.1
Gross ending balance	$	3,159.8		$	3,079.3		$	3,168.9


⁽¹⁾	Loss and LAE reserve balances from OneBeacon’s Runoff Business prior to December 31, 2012 were not classified as held for sale. Adjustment is to present loss and LAE reserve activities for continuing operations.


⁽²⁾	Loss and LAE reserves acquired in 2014 relate to Sirius Group’s purchase of Olympus Re and loss portfolio transfer from Transamerica. Loss and LAE reserves acquired in 2013 relate to WM Solutions’s purchases of Empire and Ashmere. Loss and LAE reserves acquired in 2012 relate to WM Solutions’s purchases of PICO, Citation, Woodridge and Oakwood.

Schedule of asbestos and environmental loss and LAE reserve activities

Sirius Group



Net A&E Loss Reserve Activity	Year Ended December 31,
	2014						2013						2012
Millions	Gross			Net			Gross			Net			Gross			Net
Asbestos:
Beginning balance	$	207.4		$	178.7		$	208.2		$	174.2		$	185.1		$	146.2
Losses and LAE acquired	22.9			22.9			13.0			13.0			11.0			11.0
Incurred losses and LAE	7.4			8.0			12.1			11.8			46.8			46.4
Paid losses and LAE	(21.9		)	(16.8		)	(25.9		)	(20.3		)	(34.7		)	(29.4		)
Ending balance	215.8			192.8			207.4			178.7			208.2			174.2
Environmental:
Beginning balance	20.4			15.2			20.4			15.2			22.1			16.5
Losses and LAE acquired	2.1			2.1			1.0			1.0			0.7			0.7
Incurred losses and LAE	1.6			1.6			.8			.8			(0.1		)	(0.5		)
Paid losses and LAE	(1.4		)	(1.5		)	(1.8		)	(1.8		)	(2.3		)	(1.5		)
Ending balance	22.7			17.4			20.4			15.2			20.4			15.2
Total asbestos and environmental:
Beginning balance	227.8			193.9			228.6			189.4			207.2			162.7
Losses and LAE acquired	25.0			25.0			14.0			14.0			11.7			11.7
Incurred losses and LAE	9.0			9.6			12.9			12.6			46.7			45.9
Paid losses and LAE	(23.3		)	(18.3		)	(27.7		)	(22.1		)	(37.0		)	(30.9		)
Ending balance	$	238.5		$	210.2		$	227.8		$	193.9		$	228.6		$	189.4

Loss and LAE Reserve and Net Loss and LAE Development [Table Text Block]

The components of the 2014 fourth quarter loss and LAE reserve increase and the net loss and LAE development for the full year are provided below:



Millions	2014 Fourth Quarter Reserve Increases								Full Year 2014
Underwriting Unit	Current Accident Year			Prior Accident Year			Total		Net Prior Year Development
Professional Insurance	$	22.9		$	46.4		$	69.3	$	59.1
Specialty Property	(1.1		)	5.7			4.6		1.1
Crop	3.8			—			3.8		—
Other	2.8			(.4		)	2.4		1.6
Specialty Products	28.4			51.7			80.1		61.8

Entertainment	1.5			11.6			13.1		13.5
Accident	—			3.5			3.5		6.0
Government Risks	1.2			7.1			8.3		8.5
Other	2.6			1.6			4.2		—
Specialty Industries	5.3			23.8			29.1		28.0

Total	$	33.7		$	75.5		$	109.2	$	89.8